Panetta Faces Challenge--Working With Republican Congress : Politics: Clinton strategist has a knack for making deals.

MONTEREY, Calif. â€”  Old friends from his home state have long been aware of Leon Panetta’s affable personality and deal-making skills, his knack of bringing hostile camps together to make a deal.

They don’t know how successful the Democratic President’s chief strategist will be in working with a Republican-controlled Congress, but they have a good idea of how he’ll go about it.

They saw Panetta as a congressman, for example, convert a closed military base near Monterey--Ft. Ord, with 16,000 jobs at stake--into a plan now under way for a university and research complex.

The Panetta solution was “a consummate bit of statesmanship� in the view of one community activist, Fred Harris. “And one of the most admirable things was that he didn’t even give the appearance that he was directing or manipulating the process.�

An environmentalist who has worked with Panetta in California, Dan Haifley, commented:

“Leon was very good at getting people who had not talked to each other into the same room. At the end they would not only be talking but shaking hands. He brought together warring factions over just about any volatile issue.�

After 16 years representing his hometown of Monterey in Congress, and more than a year as the head of the Office of Management and Budget, Panetta was tapped by President Clinton last June to apply those skills in the White House.

With Clinton’s political career on the line and therefore his own, the 56-year-old Panetta is facing his most difficult challenge ever.

Asked about the recent Democratic loss of congressional control to the Republicans, Panetta’s voice trembles in a brief and rare show of nerves.

“Everybody who works for the President shares the responsibility,� he says. “And we’re responsible basically for putting the pieces back together again.�

Hometowners note that Panetta’s personal skills and detailed knowledge of issues were the assets that enabled him as a congressman to establish a bipartisan record as a shrewd, level-headed negotiator whom almost everybody likes as a person.

“He is able to laugh at himself, which is why he has been successful in Washington,� says J. Breck Tostevin, who was on the Monterey High School student council with Panetta in 1955 and is now his accountant.

“He doesn’t get as many scars as other people because he doesn’t put issues in personal terms,� says Alan Schick of the Brookings Institution. “He’s a fairly honest broker and that’s important in the White House.�

Clinton’s political opponents, not surprisingly, have another view. David Mason of the conservative Heritage Foundation, says Panetta performed a “strip-tease� over the summer when he promised sweeping changes of the White House but failed to deliver the goods.

Panetta replies that he has significantly improved the White House by controlling access to the Oval Office and tightening the lines of responsibility.

“Before,’ says Panetta, “the President would answer questions on the run and did not have any kind of regularly scheduled press conferences. Now we have more regular press conferences and we try to control the events and statements so we get a clear message out each day to the public.�

But an internal Administration memo leaked to the press just after the November elections suggested a White House staff “that never got its act together� was partly to blame for the Democrats’ debacle.

If Panetta is able to get the White House on track he will do it by drawing on the consensus-building skills which helped him turn the failure to save Ft. Ord into something of a success.

The Ft. Ord conversion also helped him realize his other crowning California achievement, the 1992 designation of the Monterey Bay Marine Sanctuary, the nation’s largest marine refuge.

But one element of Panetta’s success has been diminished in his new role of chief of staff. His wife, Sylvia, manager of his district offices and most of his campaigns, was his eyes and ears back home.

“She was very much a partner in everything we did,� Panetta says, but she “never questioned my judgment� on substantive issues.

She helped her husband set up his office when he became White House chief of staff but now spends most of her time in Monterey--heavily involved in choosing a president for the new university at Ft. Ord.

Despite the marine refuge and the budding university, Panetta is not without critics back home.

Bill McCampbell, a Republican who unsuccessfully challenged Panetta for his House seat in 1992, says Panetta gets too much credit for both and believes people are otherwise misinformed about him.

“I was raised with FDR,� Panetta says, referring to President Franklin D. Roosevelt. “My first recollection is my mother crying when FDR died. Even though I was small at the time, it was enough to affect me that something serious had happened to somebody I saw in newsreels and heard on the radio.�

While he was growing up he says he respected progressive Republicans such as Earl Warren, the California governor who later became chief justice. But when he was searching for a job after law school at Santa Clara University, he knocked at the door of a California Democrat, Joseph Califano, an assistant to President Lyndon B. Johnson.

“I didn’t know him but I figured a guy who’s name was Califano might be kind to a person whose name was Panetta,� says the American-born son of Italian immigrants. Califano, who later became a member of President Jimmy Carter’s Cabinet, set up some meetings but Panetta ended up working for California’s Sen. Thomas Kuchel, a Republican.

A few years later, Panetta resigned as President Richard M. Nixon’s director of civil rights and soon switched to the Democrats. His first elective office in Monterey County was as a Democrat.

As a former Senate aide, he says he “looked at the House as sort of a mob scene while the Senate is a place for statesmen who almost always try to fix the problems that are developed by the House. So I thought no, I don’t ever want to wind up in the House.�

But Panetta did end up in the House in 1977, defeating a fiery conservative. Nearly a generation later he has opportunity once again to confront conservative Republicans.

President Clinton sent Panetta to the first meeting with the new congressional leaders. The veteran negotiator says he hopes both parties can work together but that “we will not in any way allow anyone to undermine what we have accomplished in the last two years on the economy, on crime and on education.�